6 ms·

> If people didn't want to live in cities then why does the housing there cost more? Density seems to always make an area more expensive. What are the two dens

by jjav 3y ago

> If people didn't want to live in cities then why does the housing there cost more? Density seems to always make an area more expensive. What are the two densest cities in the US? Which are the two most expensive cities in the US? Increasing density does not ever seem to make an area cheaper to live. Maybe that is ok, but it does contradict the idea of building more to make it cheaper.

AnthonyMouse 3y ago
> Density seems to always make an area more expensive. What are the two densest cities in the US? Which are the two most expensive cities in the US? The causation goes the other way. When an area has a lot of housing demand, that's where they put the tall buildings. Nobody is going to build a skyscraper in the middle of a corn field. But in order for the density to keep up with demand, you can't suppress new construction. That's what causes prices to be high: > What are the two densest cities in the US? Which are the two most expensive cities in the US? Which are the two cities in the US with the most restrictive zoning and building codes? Which are the two most expensive cities in the US?
- alistairSH 3y ago
  But in practice, we're so far behind on the supply side that we could densify much of our cities and inner suburbs and still see values rise. And I'm not convinced that when done in a playful manner, that densification doesn't add value to existing SFHs, despite now being located in a noisier/denser/whatever area. People largely prefer convenience and not driving all the time. Just walking to school is a huge plus - fewer noisy buses, more healthy kids, etc. Arlington VA added a ton of mid-rise and high-rise development in the 80s/90s (Clarendon, Courthouse, Ballston) with good results. Reston VA is now doing the same and home that were $400k a decade ago are selling for nearly double. In both cases, the scope of in-fill was tightly controlled - the local governments created dense zones around the Metro stations - which makes sense.
  - AnthonyMouse 3y ago
    > But in practice, we're so far behind on the supply side that we could densify much of our cities and inner suburbs and still see values rise. This is a common source of confusion. If you relax zoning, the instantaneous effect is that the value of land is increased in the areas where the zoning is made more permissive (because now you can do more with the land) and reduced where zoning was already permissive (because now land zoned for those uses is less scarce). So the immediate effect is that the value of the land where single-family homes are will go up, and that effect is permanent. Then the value of indoor space goes down as people are allowed to and do build more of it. Which is what we're after, because the important thing is that people can get a couple thousand sq ft of living space for an affordable price, regardless of the number of floors the building they're in has. If the value of the land doubles but the amount of housing per acre quintuples, you've still made the land cost per housing unit decline by 250%. What that does to the long-term value of existing single-family homes depends on how much demand there is. In areas where the zoning had been oppressively restrictive, the gain in land value from relaxing the zoning could exceed the amount that it's even possible to lose from the value of indoor space. For example, you have a $400,000 house and the new zoning makes the land itself worth $500,000, but housing still becomes more affordable because someone can buy that $500,000 piece of land, build a dozen housing units there and sell the property for $2.4M, pricing each of the units at $200,000. The existing single family home still sells for $500,000+ though, not because it's a housing unit but because it's an acre of land where someone could build a dozen. > In both cases, the scope of in-fill was tightly controlled - the local governments created dense zones around the Metro stations - which makes sense. It doesn't. It makes a significant amount of sense to put a 3-5 story building in an area with mostly single-family homes, because that can often be supported with no additional infrastructure. If you want to put them all in the same place then you have to upgrade the utilities and transportation infrastructure there. Which is fine if that's what happens naturally because people choose to develop a particular area, but there is no reason to force it. And trying to concentrate them all in one area also slows down the construction and makes it cost more, because then the land cost there remains high for lack of alternatives, forcing developers to buy out those particular people (and giving them undue gains that should have been evenly distributed to the community at large) instead of buying whatever properties were already on the market.
- jjav 3y ago
  > The causation goes the other way. When an area has a lot of housing demand, that's where they put the tall buildings. Nobody is going to build a skyscraper in the middle of a corn field. I believe it's a feedback loop really, not exclusively in one direction or the other. You're right that nobody wants to build a skyscraper out in the farmlands. They build it in the city, which makes that city a tiny bit more dense, pulls in more people and makes the city a small increment more attractive and pulls in even more people which in turn raises prices even more and the cycle continues. As cities get more dense they always get more expensive. Look at Manhattan, full of highrises and skyscrapers as far as the eye can see, and is the #1 most expensive area in the US to live. > Which are the two cities in the US with the most restrictive zoning and building codes? I have no idea to be honest. Do you have info on that?
  - AnthonyMouse 3y ago
    > They build it in the city, which makes that city a tiny bit more dense, pulls in more people and makes the city a small increment more attractive and pulls in even more people which in turn raises prices even more and the cycle continues. As cities get more dense they always get more expensive. This is only a feedback loop if the city becomes more attractive by a larger amount than the increase in housing. For example, if you add new housing for 1000 people and this causes 1200 new people to move to the city. If adding new housing for 1000 people causes 800 new people to move to the city, you've still created more new housing for locals than you had before, and can just keep at it. We can use basic math to see that even if the former ever happens, it can't sustainably happen. If e.g. the Chicago Metro area had the population density of Manhattan, it would have a larger population than the United States as a whole, 750M vs. 333M. A single metropolitan area could provide more housing than there are people to live in it. That many people would have to exist before they could move there. And obviously the entire US population is not going to move to a single metro area anyway, so you would reach saturation long before that. Now, one thing that does happen is that tall buildings are more expensive to build, so when you get into the extremely high densities like in Manhattan, part of the high cost is the construction cost for a building that tall. But Manhattan is an outlier. If we're talking about converting single family homes into 12-unit condos, the cost per unit isn't much different and you get a 12X increase in density. And here's another piece of the puzzle: Where are these people coming from? If you build new housing in New York, that might attract people who used to live in Boston. If you build new housing in Boston, that might attract people who used to live in Seattle. What happens if you build new housing in New York and Boston and Seattle and Los Angels etc.? If people move from everywhere to everywhere, there is no net migration and no increase in local demand. And even if you did only increase the amount of housing in New York, and that caused people to move to New York from Boston and Seattle and Los Angeles, then housing would become more affordable in Boston and Seattle and Los Angeles because the local demand there would go down. So you're talking about a hyper-local effect, whereas on a question of national policy, supply and demand is in full effect and "build more housing" makes the average unit cost less even if the ones that get more affordable aren't in the same place as the ones you build. > I have no idea to be honest. Do you have info on that? It's the same two cities. It's New York and San Francisco. They both make it extremely arduous to add new housing. Many of the existing buildings in Manhattan would be illegal to build today. SF is even worse.

by jjav 3y ago

AnthonyMouse 3y ago

> Density seems to always make an area more expensive. What are the two densest cities in the US? Which are the two most expensive cities in the US? The causation goes the other way. When an area has a lot of housing demand, that's where they put the tall buildings. Nobody is going to build a skyscraper in the middle of a corn field. But in order for the density to keep up with demand, you can't suppress new construction. That's what causes prices to be high: > What are the two densest cities in the US? Which are the two most expensive cities in the US? Which are the two cities in the US with the most restrictive zoning and building codes? Which are the two most expensive cities in the US?

alistairSH 3y ago
But in practice, we're so far behind on the supply side that we could densify much of our cities and inner suburbs and still see values rise. And I'm not convinced that when done in a playful manner, that densification doesn't add value to existing SFHs, despite now being located in a noisier/denser/whatever area. People largely prefer convenience and not driving all the time. Just walking to school is a huge plus - fewer noisy buses, more healthy kids, etc. Arlington VA added a ton of mid-rise and high-rise development in the 80s/90s (Clarendon, Courthouse, Ballston) with good results. Reston VA is now doing the same and home that were $400k a decade ago are selling for nearly double. In both cases, the scope of in-fill was tightly controlled - the local governments created dense zones around the Metro stations - which makes sense.
- AnthonyMouse 3y ago
  > But in practice, we're so far behind on the supply side that we could densify much of our cities and inner suburbs and still see values rise. This is a common source of confusion. If you relax zoning, the instantaneous effect is that the value of land is increased in the areas where the zoning is made more permissive (because now you can do more with the land) and reduced where zoning was already permissive (because now land zoned for those uses is less scarce). So the immediate effect is that the value of the land where single-family homes are will go up, and that effect is permanent. Then the value of indoor space goes down as people are allowed to and do build more of it. Which is what we're after, because the important thing is that people can get a couple thousand sq ft of living space for an affordable price, regardless of the number of floors the building they're in has. If the value of the land doubles but the amount of housing per acre quintuples, you've still made the land cost per housing unit decline by 250%. What that does to the long-term value of existing single-family homes depends on how much demand there is. In areas where the zoning had been oppressively restrictive, the gain in land value from relaxing the zoning could exceed the amount that it's even possible to lose from the value of indoor space. For example, you have a $400,000 house and the new zoning makes the land itself worth $500,000, but housing still becomes more affordable because someone can buy that $500,000 piece of land, build a dozen housing units there and sell the property for $2.4M, pricing each of the units at $200,000. The existing single family home still sells for $500,000+ though, not because it's a housing unit but because it's an acre of land where someone could build a dozen. > In both cases, the scope of in-fill was tightly controlled - the local governments created dense zones around the Metro stations - which makes sense. It doesn't. It makes a significant amount of sense to put a 3-5 story building in an area with mostly single-family homes, because that can often be supported with no additional infrastructure. If you want to put them all in the same place then you have to upgrade the utilities and transportation infrastructure there. Which is fine if that's what happens naturally because people choose to develop a particular area, but there is no reason to force it. And trying to concentrate them all in one area also slows down the construction and makes it cost more, because then the land cost there remains high for lack of alternatives, forcing developers to buy out those particular people (and giving them undue gains that should have been evenly distributed to the community at large) instead of buying whatever properties were already on the market.
jjav 3y ago
> The causation goes the other way. When an area has a lot of housing demand, that's where they put the tall buildings. Nobody is going to build a skyscraper in the middle of a corn field. I believe it's a feedback loop really, not exclusively in one direction or the other. You're right that nobody wants to build a skyscraper out in the farmlands. They build it in the city, which makes that city a tiny bit more dense, pulls in more people and makes the city a small increment more attractive and pulls in even more people which in turn raises prices even more and the cycle continues. As cities get more dense they always get more expensive. Look at Manhattan, full of highrises and skyscrapers as far as the eye can see, and is the #1 most expensive area in the US to live. > Which are the two cities in the US with the most restrictive zoning and building codes? I have no idea to be honest. Do you have info on that?
- AnthonyMouse 3y ago
  > They build it in the city, which makes that city a tiny bit more dense, pulls in more people and makes the city a small increment more attractive and pulls in even more people which in turn raises prices even more and the cycle continues. As cities get more dense they always get more expensive. This is only a feedback loop if the city becomes more attractive by a larger amount than the increase in housing. For example, if you add new housing for 1000 people and this causes 1200 new people to move to the city. If adding new housing for 1000 people causes 800 new people to move to the city, you've still created more new housing for locals than you had before, and can just keep at it. We can use basic math to see that even if the former ever happens, it can't sustainably happen. If e.g. the Chicago Metro area had the population density of Manhattan, it would have a larger population than the United States as a whole, 750M vs. 333M. A single metropolitan area could provide more housing than there are people to live in it. That many people would have to exist before they could move there. And obviously the entire US population is not going to move to a single metro area anyway, so you would reach saturation long before that. Now, one thing that does happen is that tall buildings are more expensive to build, so when you get into the extremely high densities like in Manhattan, part of the high cost is the construction cost for a building that tall. But Manhattan is an outlier. If we're talking about converting single family homes into 12-unit condos, the cost per unit isn't much different and you get a 12X increase in density. And here's another piece of the puzzle: Where are these people coming from? If you build new housing in New York, that might attract people who used to live in Boston. If you build new housing in Boston, that might attract people who used to live in Seattle. What happens if you build new housing in New York and Boston and Seattle and Los Angels etc.? If people move from everywhere to everywhere, there is no net migration and no increase in local demand. And even if you did only increase the amount of housing in New York, and that caused people to move to New York from Boston and Seattle and Los Angeles, then housing would become more affordable in Boston and Seattle and Los Angeles because the local demand there would go down. So you're talking about a hyper-local effect, whereas on a question of national policy, supply and demand is in full effect and "build more housing" makes the average unit cost less even if the ones that get more affordable aren't in the same place as the ones you build. > I have no idea to be honest. Do you have info on that? It's the same two cities. It's New York and San Francisco. They both make it extremely arduous to add new housing. Many of the existing buildings in Manhattan would be illegal to build today. SF is even worse.